Investor Presentation Schaltbau Holding AG

Transcription

1 Investor Presentation Schaltbau Holding AG April / May 2018 THE SMART EVOLUTION OF MOBILITY Picture credits: istockphoto LP

2 Investor Presentation 16 April Bringing Schaltbau back on track experienced management team Our common objectives Dr. Bertram Stausberg Thomas Dippold Dr. Martin Kleinschmitt Return to profit Spokesman of the Executive Board, CEO (since Apr 2017) CFO (since Jan 2017) CRO (since Aug 2017) Stick to stringent cost management Co-CEO Bertelsmann Printing Group (2016) CEO Be Printers and Prinovis Ltd. & Co. KG ( ) General Manager of Prinovis Ahrensburg and Itzehoe ( ) CFO Faber-Castell AG ( ) CFO Semikron International ( ) Head of Controlling SCHOTT AG ( ) Partner at Noerr LLP and CEO Noerr Consulting AG Vice Chairman of the Board SAF- HOLLAND S.A. Interim management of various SMEs as CFO/CRO (since 2001) CFO Herlitz AG ( ) Secure financing capabilities

3 Business and Market Overview

4 End markets Selected products Segments Investor Presentation 16 April Business overview Mobile Transportation Technology Components Stationary Transportation Technology ~52% (1) ~25% (1) ~23% (1) (2) Disposed Doors and boarding systems for trains, stations, buses and commercial vehicles Interior fittings, information, surveillance and communication systems, master controllers, driver desk equipment and sanitary systems for rolling stock High- and low-voltage components for rolling stock, electric vehicles and other applications Master controllers and driver desk equipment Platform screen doors, point heating systems, level crossing systems, shunting equipment, signal technology and tunnel security lighting Industrial brakes for container cranes and wind turbines Automotive Rolling Stock Industry Infrastructure (1) Source: Company information, segmental split based on FY 2017 financials (2) Put up for sale in November 2017

5 Comments Key products Subsidiaries Investor Presentation 16 April Snapshot of Schaltbau Connect Contact Control Group c. 25% of Group sales (1) Connectors Switches Contactors Master controller & driver desk Brake control High share of international sales, broad customer distribution Performed very well in 2017, growing order intake with strong and sustainable margins (1) Pre consolidation Highly efficient operations Has developed from a pure component supplier to an application specialist providing components, assembly and service Transfer of existing know how from rail applications into new markets such as switchgear for renewable energy power plants

6 Comments Key products Subsidiaries Investor Presentation 16 April Snapshot on Schaltbau Bode Group c. 40% of Group sales (1) Rail door systems Interiors Established #3 player in an oligopolistic market, strong train door systems quality track record Performance improved significantly in Q4 2017, strong order intake (1) Pre consolidation Largely inefficient operations with restructuring roadmap established Service organisation with high flexibility Has expanded customer range by leveraging train door system experience into bus and automotive applications such as Deutsche Post DHL s e- mobility vehicle StreetScooter

7 Comments Key products Subsidiaries Investor Presentation 16 April Snapshot of Pintsch Bamag Group c. 12% of Group sales (1) Level crossing Marshalling yards Axle counting Point heating High share of international sales, broad customer distribution Performed very well in 2017, growing order intake with strong and sustainable margins (1) Pre consolidation Highly efficient operations Has developed from a pure component supplier to an application specialist providing components, assembly and service Transfer of existing know how from rail applications into new markets such as switchgear for renewable energy power plants

8 4. Market and competitive environment Investor and Analyst Call 16 April Megatrends drive sustainable growth in global rail markets MobileTransportation Technology / Components Stationary Transportation Technology Services Megatrends Vehicles Infrastructure & Rail Control Digitisation / Automation Urbanisation All common railway vehicles Railway crossings, rail control and signal technology for tracks, trains and control centers Maintenance incl. spare parts and renovation Emission reductions Connectivity Electrification / e-mobility Market growth (1) : ~1.9% Market size: ~ 60bn Market growth (1) : ~2.8% Market size: ~ 52bn Market growth (1) : ~2.8% Market size: ~ 73bn Safety Regional expected market growth (1)(2) Western Europe: ~3.0% Asia / Pacific: ~2.6% NAFTA: ~2.2% CIS: ~1.1% Eastern Europe: ~3.1% Africa / ME: ~2.3% Latin America: ~1.8% Globalisation / China Regulation and Liberalisation Source: Unife, Roland Berger (1) Average annual market growth from until over six years (services for rail control not considered) (2) Vehicles, rail control and services; infrastructure and services for rail control not considered

9 Investor Presentation 16 April Railway market with oligopolistic supplier structure in many segments Overall rolling stock OEMs in the market Selected suppliers in the Schaltbau railway market / (3) 14% bn (1) 5% 4% 4% 3% Other OEM (2) Other 70% Source: Company information (1) Revenue 2015; (2) Incl. Hitachi Rail, Stadler, CAF, Pesa. ABB and Thales Transport not considered (mainly in infrastructure or control command and signalling technology); (3) Pre Wabtec takeover 10.

10 Striving for sustainable and profitable growth Management Agenda 2017 fulfilled

11 1. Key developments 2017 Investor and Analyst Call 16 April Management agenda 2017 fulfilled: higher financial flexibility for ongoing restructuring activities and organic growth in core business areas Stabilisation of financial situation Major cost reduction programmes initiated Strengthening of future competitiveness Stabilisation of operative business Divestiture of non-core industrial brakes business (Pintsch Bubenzer) effective 1 March 2018 Two successful capital increases in May 2017 and February 2018 Reduction of short- and mid-term financial debt Optimisation of production and logistic processes Strict focus on reduction of personnel cost and material expenses by improving purchasing conditions Reduction of complexity of Group organisation, improved steering and limitation of risks Investments mainly into mobility/logistics applications and further rolling stock development Digitisation: product development to be increasingly aligned towards customers needs Extended business model: services for the entire lifecycle of rolling stock and commercial vehicles Focus on local presence in international markets Strong order intake, revenue and EBIT development throughout second half of 2017 Record level of orders at hand

12 2. Financials Investor and Analyst Call 16 April Sales and earnings targets 2017 (as adjusted over time) achieved Sales +1.5% vs million Order intake +7.8% vs million EBIT 2.4 million before one-off effects One-off effect of revaluation of Schaltbau Sepsa: Goodwill impairment Schaltbau Pintsch Bubenzer: million reported million -1.1 million

13 2. Financials Investor and Analyst Call 16 April Strong order intake mainly due to contribution from Mobile Transportation Technology segment Order intake grows by 7.8% Mainly driven by Mobile Transportation Technology segment, also impacted by a full-year contribution from Schaltbau Sepsa (consolidated since 30 September 2016) and relocation of the Refurbishment business (was part of Stationary Transportation Technology before) Very positive order intake development in the Components segment Significant decrease of order intake in Stationary Transportation Technology segment due to lower order placements in Germany as well as a more conservative approach on international projects Order book increases by 18.3% to million (end of 2016: million) Order intake in million Mobile Transportation Technology Stationary Transportation Technology Components

14 2. Financials Investor and Analyst Call 16 April Sales increase in line with management expectations Sales up by 1.5% Significant increase in second half of 2017 mainly due to completion of major projects Slight decrease in comparable sales of 4% mainly driven by strong decline in industrial brakes volume (Pintsch Bubenzer) and a lower volume in level crossing technology Full-year contribution of Schaltbau Sepsa offsets organic decline Sales in million Sales 2017 by market in % Germany Germany Rest of Europe Rest of Europe Rest of World Rest of World Mobile Transportation Technology Stationary Transportation Technology Components

15 2. Financials Investor and Analyst Call 16 April Extraordinary Schaltbau Sepsa revaluation impacts Group EBIT in 2017 EBITDA improved year-on-year Reported EBIT at million, EBIT margin at -4.4% One-off effect of revaluation of Schaltbau Sepsa amounting to million Goodwill impairment Schaltbau Pintsch Bubenzer amounting to -1.1 million Additional expenses for restructuring activities of around 8 million EBIT and EBITDA in million % +3.2% -2.8% % EBIT EBITDA -23.0

16 2. Financials Investor and Analyst Call 16 April Net result 2017 impacted by higher financing costs Strong decline in Schaltbau Group s net profit mainly driven by: Decreased EBIT Higher interest expenses due to higher interest margins as well as higher drawing of existing credit lines 20,0 10,0 0, per share Net profit in million per share One-time effects related to refinancing activities -10,0-20, ,0-40,0-50,0-60, Group net profit Schaltbau Shareholders

17 3. Priorities until 2020 Investor and Analyst Call 16 April Restructuring roadmap Schaltbau: Major milestones successfully achieved further road to go Create financial headroom Achieve satisfactory debt level Ensure profitability on market level Stabilize operational performance Selective investments Step up investments in market opportunities and digital business models EXPLOIT GROWTH OPPORTUNITIES REDUCE COMPLEXITY REDUCE COSTS REDUCE DEBT

18 Investor Presentation 16 April Comprehensive restructuring measures initiated Operational restructuring measures Subsidiary Selected measures Current status Group Group-wide procurement optimization Holding Mobile Transportation Technology Components Stationary Transportation Technology Personnel adjustments, restructuring of central functions (e.g. Controlling) Expansion of after sales business, new business with composites for interiors Purchase price reduction & quality management Restructuring of production concept & production control ( state-of-the-art production ) General purchase price reductions Efficiency increase / reduction of personnel cost ratio Raising value for the customer through expanded module offering Execution of order for >300 trains (Italian prototype) Expansion of services & after-sales business Planned expansion of refurbishment & services business Improvement of terms and conditions with large customers Efficiency increase in production through lean management Relocation of production site Sprockhövel to Dinslaken (end of 2019)

19 Strategic Agenda

20 Investor Presentation 16 April Strategic agenda of Schaltbau Group Goals 1 Maintain a leading market position 2 3 Focus on profitable sustainable business activities Implement restructuring concept to increase profitability Sustainable and profitable growth 4 Create new business opportunities via collaboration between product areas and business segments 5 Increase customer focus and strengthen client relationships

21 Investor Presentation 16 April Main pillars of Schaltbau Group strategic agenda Sustainable and profitable growth Technical innovation, quality and system integration Operational excellence (performance culture) Comprehensive market and customer handling (customer focus) Systematic lifecycle business models incl. After Sales / Service Internationalisation Think global / Act local Solid financing to enable strategic and operational flexibility Corporate culture und governance / Qualified employees / Ready-for-change organisational culture

22 OEMs Investor Presentation 16 April Strategic positioning going forward 1 Regions 2 Products 3 Customers 4 Operations DACH and rest of Europe as core markets (c. 70% of revenue) Representation in China via several JVs and customer relations of German subsidiaries (c. 17% of revenue) Increasing importance of the US Regional production and R&D activities to react to market changes and meet increasing local content requirements Interconnected (digital) products which communicate with each other Common communication standard for all solutions as prerequisite towards the development of smart products Leverage product know-how / applications to new business areas (e.g. intelligent door systems for automotive division) Expansion of business with railway and automotive OEMs in Mobile Transportation Technology Maintain strong relationship with Deutsche Bahn in infrastructure business Customer relations exist on various levels as well as with different companies of the Group coordination / development under Key Account Management Continuous efficiency improvements along the entire value chain Targeted production optimisation through implementation of lean production approaches Further efficiency advantages through consolidation of productions Europe as core market with additional bases in China and USA Supplier with digital product portfolio Focus on railway and automotive industry Achieve operational excellence throughout the value chain 5 Management principles Decentralised entities with enhanced management/leadership structure (SMC) Greater transparency, more standardised coordination throughout the Group

23 6. Guidance Investor and Analyst Call 16 April Targets 2018 Solid order backlog from stabilised order intake in 2017 serves as stable basis for profitable growth Initial positive effects from restructuring measures implemented in the financial year 2017 expected to contribute to an improvement in EBIT margin: Increase in profitability through optimized production processes and improved purchase conditions should lead to a decline in material and personnel expenses Non-operating special effects from extraordinary impairments arising out of restructuring measures or disposal of subsidiaries will possibly continue to occur in 2018 Outlook (in million) Guidance FY 2018 * 2017 Order intake ** Sales ** Mobile Transportation Technology Stationary Transportation Technology Significant improvement Significant decline Components Slight increase EBIT margin Around 3% ** 0.5%*** * Compared to FY 2017 ** Excluding Schaltbau Pintsch Bubenzer, including Schaltbau Sepsa *** Excluding extraordinary items

24 Investor Presentation 16 April Schaltbau Vision 2020 Disposal of non-core business Operational excellence throughout the organization 2020 Overall increased share of service and international revenues State-of-the-art product and service offering in terms of quality and innovation Our clear goal is to focus Schaltbau Group on its strategic core competencies and to consistently increase profitability. That is why we intend to dispose non-core business areas as well as those which are not sustainably profitable. These alignments should result in reduced revenues and simultaneously increased profitability until 2020, enabling Schaltbau to return to historical profitability levels and future growth.

25 Apendix Figures Fiscal Year 2017

26 2. Financials Investor and Analyst Call 16 April Mobile Transportation Technology: Growth driven by consolidation effects Order intake up 70.2 million vs Positive development at rail door systems as well as interiors for rail vehicles Significant new orders, e. g. from Hitachi Rail Italy for delivery of 39 vehicles including options of up to 300 vehicles Sales growth of 43.1 million vs Full-year contribution from Schaltbau Sepsa (+ 19 million) and reclassification of Schaltbau Refurbishment (+ 12 million) Organic business growth at Rawag and Alte EBIT margin of -10.0% vs. +2.3% in 2016 Revaluation of Schaltbau Sepsa ( 24.2 million) Negative operating contribution from Schaltbau Sepsa Group ( -8.7 million) and other foreign subsidiaries almost compensated by positive margin at Bode and Rawag Order intake and revenue in million % +19.4% Order intake Revenue EBIT in million EBIT * *operating EBIT 2017: -2.2 million; effect from revaluation of Schaltbau Sepsa: million

27 2. Financials Investor and Analyst Call 16 April Stationary Transportation Technology: Weak order intake and revenue development Significantly lower order intake volume Decline in new business with level crossing technology as well as railway signal technology (axle counting and shunting technology) Sales decrease by 28.8 million vs Mainly driven by rail infrastructure products and brake systems Shift of Refurbishment business ( 11.9 million) to MTT EBIT margin of -4.6% (FY 2016: -18.8%) Cost-cutting measures compensate negative volume effects to just a small extent Impairment at Schaltbau Pintsch Bubenzer ( -1.1 million) Provisions for contingent losses high in 2016 ( 16.4 million) Order intake and revenue in million % -19.4% Order intake Revenue EBIT in million EBIT

28 2. Financials Investor and Analyst Call 16 April Components: Strong business performance Order intake clearly improved ( million) Higher order intake volume for snap-action switches for rail vehicles both in the new vehicles business and in aftersales business Positive development at SPII in Italy; stabilisation of business in China despite investment shift from locomotives and passenger coaches to metro systems; North America below prior year due to project delays Sales decrease of 6.8 million vs Significantly lower revenue at SPII partially offset by sales increases at Schaltbau GmbH EBIT margin improves to 16.4% (2016: 12.5%) Moderate sales decrease overcompensated by positive product mix effects and improved cost structure Order intake and revenue in million % -4.9% Order intake Revenue EBIT in million % EBIT

29 2. Financials Investor and Analyst Call 16 April Slight decrease in Group assets due to divestiture effects Non-current assets 40.0 million below prior year, reduction of both tangible and intangible assets Depreciation on Schaltbau Sepsa due to classification as assets held for sale ( 24.2 million) Classification of Pintsch Bubenzer as assets held for sale ( 16 million) Foundation of joint venture Zhejiang Yonggui Bode Transportation Equipment in China; payment of initial capital contribution Current assets significantly higher ( million): Classification of Schaltbau Sepsa and Schaltbau Pintsch Bubenzer as assets held for sale 15.6 million cash inflow from capital increase in May 2017 reported under other receivables and assets Assets in million End of End of Non-current Current

30 2. Financials Investor and Analyst Call 16 April Equity & liabilities: negative group result impacts equity Higher non-current liabilities due to restructuring of financial debt: syndicated loan line amounting to million and debenture stock classified as long-term liabilities Current liabilities down to million due to the aforementioned reclassifications; bridge financing of 25.0 million and current account liabilities classified as short-term Equity decreases by 36.5 million despite 15.5 million capital increase, due to negative net group result; equity ratio of 15.6% (end of 2016: 23.3%) Net financial debt increases to million (end of 2016: million) Leverage (net financial debt/annual EBITDA) at 7.9 (2016: 9.1); mid-term goal: Further reduction of net financial debt relative to EBITDA to reach a leverage figure around 3 In Q1 2018, the situation improved significantly, driven by the sale of Pintsch Bubenzer and a major equity injection Liabilities in million End of End End of of Equity Non-current Current

31 2. Financials Investor and Analyst Call 16 April Positive operating cash flow in 2017 Positive operating cash flow ( million) reflects stringent working capital management (operating cash flow in FY 2016: million) Cash outflow for investments increases vs ( million), proceeds from capital increase deposited on escrow account ( 15.6 million) Financing cash flow 2017 mainly reflects: 15.5 million cash inflow from capital increase and 4.1 million from new loans Cash flow 2017 in million EUR Thereof: 15.5 m. EUR escrow account for debt redemption 6.0 million repayment of loans and 11.4 million cash outflow for interest payments ,7-0, Cash EoFY 2016 CF op. CF invest CF fin. Currency Cash EoFY 2017 Free cashflow= CF op.+cf invest.

32 Financial calendar and contact details 2018 Quarterly Statement Q General Meeting of Shareholders Interim Report H Quarterly Statement 9M May 7 June 8 August 8 November IR contact Wolfgang Güssgen Head of IR & CC guessgen@schaltbau.de T Schaltbau Holding AG Hollerithstrasse Munich Germany Picture credits: istockphoto LP

33 Investor Presentation 16 April Disclaimer This presentation contains forward-looking statements. These statements are based on the current views, expectations and assumptions of the management of Schaltbau Holding AG and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those described herein due to factors affecting Schaltbau Holding AG such as, among other things, changes in the general economic and competitive environment, capital market risks, currency exchange rate fluctuations and competition from other companies, and changes in international and national laws and regulations, in particular with respect to tax laws and regulations. Schaltbau Holding AG does not assume any obligation to update any forward-looking statements. The information contained in this presentation is for background purposes only and does not purport to be full or complete. No reliance may be placed, for any purpose, on the information contained in this announcement or its accuracy or completeness. The information in this presentation is subject to change.